AP NEWS

StoneMor Partners L.P. Reports Financial Results for 2018 Second Quarter

February 12, 2019

TREVOSE, Pa., Feb. 12, 2019 (GLOBE NEWSWIRE) -- StoneMor Partners L.P. (NYSE: STON) (“StoneMor” or the “Partnership”), a leading owner and operator of cemeteries and funeral homes, today reported financial results for the three and six month periods ended June 30, 2018. Investors are encouraged to read the Partnership’s quarterly report on Form 10-Q filed with the Securities and Exchange Commission (the “SEC”), which contains additional details, and can be found at www.stonemor.com.

Joe Redling, StoneMor’s President and Chief Executive Officer, said, “The second quarter of 2018 generated stable year over year results in many of our key performance metrics such as interments performed, net interment rights sold and cemetery contracts written. As a reminder, our financial results for the period did not yet reflect the impact of our reorganization and cost reduction efforts, which we began in the second half of 2018, and, as we previously disclosed, will take time to deliver the full results we seek. The recently reported amendment to our credit facility and financing agreement are key components of the foundation for future success, and we expect to become current in our financial filings shortly. We believe the actions we’ve taken to reorganize the business, align expenses and put the company on a better financial foundation will support improvements in 2019.”

SECOND QUARTER AND SIX MONTH FINANCIAL PERFORMANCE

-- For the three months ended June 30, 2018, revenues were $81.6 million compared to $86.0 million in the prior year period. 2018 six-month revenues were $159.5 million compared to $168.9 million in the prior year period. Two factors were largely responsible for the unfavorable comparison. In the first half of 2017, revenues benefited from a large backlog of preneed cemetery merchandise that became available to be serviced and the adoption of ASC 606 in 2018 which resulted in a reduction associated with the deferral of revenue from document fees, combined with a decrease in land sales. -- Second quarter net loss was $17.0 million compared to $11.6 million in the prior year period. Year-to-date net loss was $34.9 million compared to $20.1 million. The increased losses were driven largely by the unfavorable comparisons previously mentioned, increased expenses related to the adoption of ASC 606, advertising and employee benefits, as well as the continued impact of higher corporate overhead related to professional fees associated with delayed financial filings and legal costs. -- As of June 30, 2018, year-to-date cash from operations was $15.4 million, largely equal to the prior year period. -- Merchandise trust value at June 30, 2018 was $511.9 million compared to $515.5 million at December 31, 2017. -- Deferred revenue at June 30, 2018 was $933.2 million compared to $912.6 million at December 31, 2017. -- As of June 30, 2018, the Partnership had $15.0 million of cash and cash equivalents and $322.6 million of total debt, including $156.9 million outstanding under its revolving credit facility.

About StoneMor Partners L.P.

StoneMor Partners L.P., headquartered in Trevose, Pennsylvania, is an owner and operator of cemeteries and funeral homes in the United States, with 322 cemeteries and 90 funeral homes in 27 states and Puerto Rico.

StoneMor is the only publicly traded death care company structured as a partnership. StoneMor’s cemetery products and services, which are sold on both a pre-need (before death) and at-need (at death) basis, include: burial lots, lawn and mausoleum crypts, burial vaults, caskets, memorials, and all services which provide for the installation of this merchandise. For additional information about StoneMor Partners L.P., please visit StoneMor’s website, and the investors section, at http://www.stonemor.com.

Cautionary Note Regarding Forward-Looking Statements

Certain statements contained in this press release, including, but not limited to, information regarding the expected timing of filings and operational improvements, are forward-looking statements. Generally, the words “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “project,” “expect,” “predict” and similar expressions identify these forward-looking statements. These statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.

Forward-looking statements are based on management’s current expectations and estimates. These statements are neither promises nor guarantees and are made subject to certain risks and uncertainties that could cause actual results to differ materially from the results stated or implied in this press release. StoneMor’s major risks are related to our substantial secured and unsecured indebtedness, our ability to refinance our secured indebtedness in the near term, uncertainties associated with the cash flow from pre-need and at-need sales, trusts and financings, which may impact StoneMor’s ability to meet its financial projections, service its debt and resume paying distributions, as well as with StoneMor’s ability to maintain an effective system of internal control over financial reporting and disclosure controls and procedures.

StoneMor’s additional risks and uncertainties include, but are not limited to: the consequences of the Partnership’s delinquent filing of its Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2018 (the “Delinquent Report”), including that the U.S. Securities and Exchange Commission could institute an administrative proceeding seeking the revocation of the registration of the Partnership’s common units under the Exchange Act, and that the Partnership remains delinquent in its required filings with the New York Stock Exchange (“NYSE”) and could ultimately face the possible delisting of its common units from the NYSE; the potential for defaults under the Partnership’s amended credit facility if the Delinquent Report is not filed within the period specified therein or the indenture governing its senior notes if the Partnership fails to file it within 120 days after notice from the trustee under the indenture; the Partnership’s ability to obtain relief from its creditors if it cannot file the Delinquent Report within the period prescribed by the Partnership’s amended credit facility or within 120 days after notice from the trustee under the indenture governing its senior notes, the terms on which such relief might be granted and any restrictions that might be imposed in connection with any relief that might be obtained; uncertainty associated with the consummation of the Partnership’s reorganization transactions; StoneMor’s ability to successfully implement its strategic plan relating to achieving operating improvements, including improving sales productivity and reducing operating expenses; the effect of economic downturns; the impact of StoneMor’s significant leverage on its operating plans; the decline in the fair value of certain equity and debt securities held in StoneMor’s trusts; StoneMor’s ability to attract, train and retain an adequate number of sales people; uncertainties associated with the volume and timing of pre-need sales of cemetery services and products; increased use of cremation; changes in the death rate; changes in the political or regulatory environments, including potential changes in tax accounting and trusting policies; StoneMor’s ability to successfully compete in the cemetery and funeral home industry; litigation or legal proceedings that could expose StoneMor to significant liabilities and damage StoneMor’s reputation, including but not limited to litigation and governmental investigations or proceedings arising out of or related to accounting and financial reporting matters; the effects of cyber security attacks due to StoneMor’s significant reliance on information technology; uncertainties relating to the financial condition of third-party insurance companies that fund StoneMor’s pre-need funeral contracts; and various other uncertainties associated with the death care industry and StoneMor’s operations in particular.

When considering forward-looking statements, you should keep in mind the risk factors and other cautionary statements set forth in StoneMor’s Annual Report on Form 10-K and the other reports that StoneMor files with the Securities and Exchange Commission, from time to time. Except as required under applicable law, StoneMor assumes no obligation to update or revise any forward-looking statements made herein or any other forward-looking statements made by it, whether as a result of new information, future events or otherwise.

CONTACT: John McNamara Director - Investor Relations StoneMor Partners L.P. (215) 826-2945

STONEMOR PARTNERS L.P. CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (in thousands) June 30, 2018 December 31, 2017 ------------- ------------- Assets Current assets: Cash and cash equivalents $ 14,979 $ 6,821 Accounts receivable, net of allowance 66,837 79,116 Prepaid expenses 9,180 4,580 Assets held for sale 1,343 1,016 Other current assets 17,930 21,453 Total current assets 110,269 112,986 Long-term accounts receivable, net of allowance 95,421 105,935 Cemetery property 335,037 333,404 Property and equipment, net of accumulated depreciation 113,229 114,090 Merchandise trusts, restricted, at fair value 511,852 515,456 Perpetual care trusts, restricted, at fair value 340,364 339,928 Deferred selling and obtaining costs 112,025 126,398 Deferred tax assets 92 84 Goodwill 24,862 24,862 Intangible assets, net 62,342 63,244 Other assets 25,161 19,695 ----------- - ----------- - Total assets $ 1,730,654 $ 1,756,082 - --------- - - --------- - Liabilities and Partners’ Capital Current liabilities: Accounts payable and accrued liabilities $ 51,926 $ 43,023 Accrued interest 1,912 1,781 Current portion, long-term debt 2,139 1,002 ----------- - ----------- - Total current liabilities 55,977 45,806 Long-term debt, net of deferred financing costs 320,495 317,693 Deferred revenues, net 933,159 912,626 Deferred tax liabilities 6,623 9,638 Perpetual care trust corpus 340,364 339,928 Other long-term liabilities 43,464 38,695 Total liabilities 1,700,082 1,664,386 ----------- - ----------- - Commitments and contingencies Partners’ capital (deficit): General partner interest (3,615 ) (2,959 ) Common limited partners’ interest 34,187 94,655 ----------- - ----------- - Total partners’ capital 30,572 91,696 ----------- - ----------- - Total liabilities and partners’ capital $ 1,730,654 $ 1,756,082 - --------- - - --------- -

See Accompanying Notes to the Unaudited Condensed Consolidated Financial Statements.

STONEMOR PARTNERS L.P. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (in thousands, except per unit data) Three Months Ended Six Months Ended June 30, June 30, 2018 2017 2018 2017 ----------- ----------- ----------- ----------- Revenues: Cemetery: Interments $ 20,789 $ 19,641 $ 40,414 $ 37,620 Merchandise 17,116 18,834 33,743 37,131 Services 17,737 18,619 34,228 35,132 Investment and other 12,038 13,652 21,538 26,390 Funeral home: Merchandise 6,522 6,749 13,951 14,585 Services 7,369 8,457 15,642 18,040 --------- - --------- - --------- - --------- - Total revenues 81,571 85,952 159,516 168,898 --------- - --------- - --------- - --------- - Costs and Expenses: Cost of goods sold 13,086 12,043 26,521 25,562 Cemetery expense 21,007 20,124 38,421 36,821 Selling expense 17,166 15,623 33,422 32,082 General and administrative expense 10,163 9,753 21,121 19,710 Corporate overhead 15,165 16,067 26,992 27,171 Depreciation and amortization 3,071 3,391 6,116 6,846 Funeral home expenses: Merchandise 1,108 1,623 3,586 3,383 Services 5,582 5,454 11,100 11,153 Other 3,961 4,987 9,001 10,332 --------- - --------- - --------- - --------- - Total costs and expenses 90,309 89,065 176,280 173,060 Other losses — (1,071 ) (5,205 ) (1,071 ) Interest expense (8,107 ) (6,741 ) (15,220 ) (13,447 ) --------- - --------- - --------- - --------- - Loss before income taxes (16,845 ) (10,925 ) (37,189 ) (18,680 ) Income tax benefit (expense) (172 ) (657 ) 2,249 (1,463 ) --------- - --------- - --------- - --------- - Net loss $ (17,017 ) $ (11,582 ) $ (34,940 ) $ (20,143 ) - ------- - - ------- - - ------- - - ------- - General partner’s interest $ (177 ) $ (121 ) $ (364 ) $ (210 ) Limited partners’ interest $ (16,840 ) $ (11,461 ) $ (34,576 ) $ (19,933 ) Net loss per limited partner unit (basic and diluted) $ (0.44 ) $ (0.30 ) $ (0.91 ) $ (0.53 ) Weighted average number of limited partners’ units 37,958 37,957 37,958 37,938 outstanding (basic and diluted)

See Accompanying Notes to the Unaudited Condensed Consolidated Financial Statements.

STONEMOR PARTNERS L.P. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (in thousands) Six Months Ended June 30, 2018 2017 ----------- ----------- Cash Flows From Operating Activities: Net loss $ (34,940 ) $ (20,143 ) Adjustments to reconcile net loss to net cash provided by operating activities: Cost of lots sold 3,489 5,661 Depreciation and amortization 6,116 6,846 Provision for bad debt 1,644 2,682 Non-cash compensation expense 1,913 488 Non-cash interest expense 3,215 2,195 Non-cash impairment charge and other losses 5,205 872 Changes in assets and liabilities: Accounts receivable, net of allowance 1,195 (4,946 ) Merchandise trust fund (4,181 ) 43,915 Other assets (1,395 ) (3,125 ) Deferred selling and obtaining costs (4,184 ) (6,287 ) Deferred revenues, net 33,599 (17,633 ) Deferred taxes, net (2,649 ) 944 Payables and other liabilities 6,377 4,031 --------- - --------- - Net cash provided by operating activities 15,404 15,500 --------- - --------- - Cash Flows From Investing Activities: Cash paid for capital expenditures (7,626 ) (3,311 ) Cash paid for acquisitions (833 ) — Proceeds from divestitures — 451 Proceeds from asset sales 401 ----------- --------- - Net cash used in investing activities (8,459 ) (2,459 ) --------- - --------- - Cash Flows From Financing Activities: Cash distributions — (24,545 ) Proceeds from borrowings 16,880 62,792 Repayments of debt (12,896 ) (56,256 ) Cost of financing activities (2,771 ) (776 ) --------- - --------- - Net cash provided by (used in) financing activities 1,213 (18,785 ) --------- - --------- - Net increase (decrease) in cash and cash equivalents 8,158 (5,744 ) Cash and cash equivalents - Beginning of period 6,821 12,570 --------- - --------- - Cash and cash equivalents - End of period $ 14,979 $ 6,826 - ------- - - ------- - Supplemental disclosure of cash flow information: Cash paid during the period for interest $ 12,865 $ 11,118 Cash paid during the period for income taxes $ 709 $ 2,630 Non-cash investing and financing activities: Acquisition of assets by financing $ 688 $ 1,384 Classification of assets as held for sale $ 543 $ 1,169

See Accompanying Notes to the Unaudited Condensed Consolidated Financial Statements.

SUPPLEMENTAL OPERATING DATA Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 ------- ------------------ ------- ---------------- Interments performed 14,102 13,627 28,674 28,057 Interment rights sold (1) Lots 8,941 8,604 15,477 15,856 Mausoleum crypts (including pre-construction) 301 553 847 1,083 Niches 430 492 859 962 Net interment rights sold (1) 9,672 9,649 17,183 17,901 ------ ------ ----------- ------ ------ --------- Number of pre-need cemetery contracts written 11,547 12,087 21,709 23,523 Number of at-need cemetery contracts written 15,276 15,575 30,003 30,859 Number of cemetery contracts written 26,823 27,662 51,712 54,382 ------ ------ ----------- ------ ------ ---------

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1. Net of cancellations. Sales of double-depth burial lots are counted as two sales.

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